Revenue-based finance: capital that's repaid as a share of sales

How does revenue-based finance actually work?

Instead of a fixed monthly repayment, you agree to hand over a set slice of your revenue until a total amount has been repaid. The total is agreed at the start. The speed at which you get there depends on how well the business trades.

That’s the appeal: repayments breathe with the business. A quiet January doesn’t come with the same repayment as a booming December. For businesses whose revenue is steady over a year but lumpy week to week, that can be much easier to live with than a fixed instalment.

Who does revenue-based finance suit?

It works best where revenue is:

• Frequent — daily or weekly sales rather than a few big invoices
• Trackable — through card terminals, online platforms or accounting software
• Reasonably predictable over a year, even if individual weeks vary

That’s a good description of online stores, subscription businesses, cafes and restaurants, gyms and studios, and many retailers. It’s a weaker fit for builders and consultants paid in large progress claims, where the invoice finance or line of credit lanes usually work better.

How fast can it land?

As a general market guide, revenue-based funders often decide within days, because they assess using live sales data rather than a full set of financial statements. The first set-up — connecting the provider to your platform or bank feeds and reviewing your history — is the main wait. Repeat funding with the same provider tends to be quicker.

Stage	What happens
Connect	Provider reviews sales history through your platform or bank data
Offer	Amount, share of revenue and total repayable are set
Fund	Money lands once documents are signed
Repay	A share of each period’s revenue goes to the funder automatically

If you need money the same day and don’t have property, compare this with smaller unsecured amounts, where same-day funding is possible.

What should you compare before signing?

Flexibility is valuable, but it isn’t free. Line up any offer against an alternative using the same yardsticks:

1. Total repayable in dollars. The single most useful number.
2. Share of revenue taken. Can the business still pay suppliers and wages from what’s left on a slow week?
3. Minimum repayments. Some agreements include a floor that applies even if sales drop.
4. Early repayment. Is there any saving for paying it off sooner?
5. Security and guarantees. What’s being pledged, and by whom.

The Capital Speed Planner shows revenue-based funding alongside the other lanes, so you can see where it sits on timing.

An illustrative example

A specialty coffee roaster sells wholesale and online, with around $70,000 of monthly card and platform sales that dip each winter. It wants $50,000 for a new roasting run and a marketing campaign ahead of spring. Under a revenue-based agreement, a fixed share of sales flows to the funder: more in the busy months, less in the quiet ones. The total repayable is known from day one, and the business isn’t squeezed by a fixed instalment in July. (Illustrative only.)

Revenue-based finance or a fixed loan?

Choose revenue-based if the main risk you’re protecting against is uneven weeks. Choose a fixed loan if your revenue is steady and you’d rather know the exact repayment schedule — fixed instalments are easier to budget, and the total cost is often lower when the term is short. The page on merchant cash advances covers the card-terminal version of this model.

Not sure which fits? Ask a specialist — it’s quicker than reading three providers’ fine print.

How providers assess revenue-based finance

Revenue-based funders typically look at:

• Revenue history — usually several months, ideally a year, to see seasonality
• Growth trend — rising, steady or falling
• Revenue concentration — reliance on one platform, product or channel
• Refunds and chargebacks — high rates suggest risk
• Margins — the share taken comes out of revenue, so thin margins matter

Because assessment is driven by data, connecting your sales platform, payment gateway or accounting software usually speeds things up.

What happens in a downturn

The main benefit of revenue-based finance shows up when sales drop: repayments drop too. But check the details:

• Is there a minimum repayment that applies regardless of sales?
• Is there a maximum term, after which any balance becomes due?
• What happens if revenue stops entirely — for example, if a platform suspends your account?

Understanding these terms before you sign means a slow season doesn’t become a surprise.

Revenue-based finance for subscription businesses

Subscription and recurring-revenue businesses are often a strong fit. Predictable monthly revenue lets funders forecast repayments with confidence, and the funding can be used to acquire customers whose lifetime value exceeds what they cost to win. If your churn is low and your customer acquisition cost is measured, revenue-based finance can be an efficient way to accelerate growth without giving up equity.

See whether your sales could fund your next move

Revenue-based finance turns predictable sales into capital you can use now. If your takings are steady and trackable, it’s worth knowing what they’d support. There’s no credit check when you first enquire, we don’t hand your details to a queue of funders, and a real person calls you to work out the best lane. Tell us your monthly sales and what the money’s for as accurately as you can. Find out what your revenue supports.